Which of the following is NOT a step in creating a capability-based pay structure?

The correct answer is that developing protocols is not a step in creating a capability-based pay structure. In a capability-based pay structure, the main focus is on evaluating and compensating employees based on their skills, experience, and contributions to the organization.

To establish such a pay structure, it's essential to assess employee skills, which involves identifying the competencies and capabilities each employee possesses. This forms the foundation for deciding how capabilities correlate with pay.

Defining performance criteria is also critical, as it establishes the standards by which employee performance and capability utilization will be measured. This helps to ensure that the pay structure reflects not only the skills of employees but also how effectively they apply those skills in their roles.

Determining market pay rates plays a role in aligning the organization’s pay structure with industry standards to remain competitive and ensure fair compensation relative to external benchmarks.

While developing protocols may be an important part of the overall HR process, it does not specifically pertain to the steps needed for creating a capability-based pay structure, which focuses more directly on assessing skills, defining performance, and market alignment.